NZD

The RBA held interest rates unchanged Tuesday at 4.35% as we expected emphasising the need to remain focused on upside risks to inflation. The Australian Dollar (AUD) rising to 0.5055 (1.9780) before returning to post 0.5112 (1.9560) as US Election voting kicked in. The first rate cut for the RBA may not come until the February meeting in 2025. The RBA may wait until the 4th quarter CPI release on the 29th of January 2025 before making a decision on this. The Bank of England are widely expected to cut 25 points in the morning to 4.75% however they may signal a shallower easing cycle if new budget forecasting comes into play.

Current Level: 1.9607
Resistance: 1.9840
Support: 1.9340
Last Weeks Range: 1.9572- 1.9884

Price action in the Euro (EUR), New Zealand Dollar (NZD) cross has been dictated by US Elections results with the Euro selling off to 0.5565 (1.7970) from 0.5485 (1.8230) over the past couple of days. Markets clearly expecting a Trump presidency. NZ unemployment rose to 4.8% from 4.6% in the second quarter, employers shedding workers until cost pressures ease. This “if anything” confirming further interest rate cuts are needed with prospects now the RBNZ may cut 75 points later this month instead of 50 points.

Current Level: 1.8066
Resistance: 1.8200
Support: 1.8000
Last Weeks Range: 1.7833 – 1.8071

Price action in the Euro (EUR), New Zealand Dollar (NZD) cross has been dictated by US Elections results with the Euro selling off to 0.5565 (1.7970) from 0.5485 (1.8230) over the past couple of days. Markets clearly expecting a Trump presidency. NZ unemployment rose to 4.8% from 4.6% in the second quarter, employers shedding workers until cost pressures ease. This “if anything” confirming further interest rate cuts are needed with prospects now the RBNZ may cut 75 points later this month instead of 50 points.

Current Level: 0.5535
Support: 0.5470
Resistance: 0.5555
Last week’s range: 0.5472- 0.5552

It’s been far to “risky” a week with all that’s been going on for the New Zealand Dollar (NZD) to gain any real momentum. The kiwi slipping lower from 2.1590 to 2.1770 amid US election action over the past day or so against the British Pound (GBP). NZ unemployment ticked up from 4.6% to 4.8% in the second quarter but lower than forecast of 5.00%, annual wage inflation slowing for the 6th straight month. Unemployment is expected to continue rising giving support to much further interest rate cuts by the RBNZ. Attention now lies with Friday mornings Bank of England (BoE) cash rate with a 25-point cut to 4.75% predicted.

Current Level: 2.1677
Resistance: 2.1900
Support: 2.1560
Last Weeks Range: 2.1516- 2.1843

It’s been far to “risky” a week with all that’s been going on for the New Zealand Dollar (NZD) to gain any real momentum. The kiwi slipping lower from 2.1590 to 2.1770 amid US election action over the past day or so against the British Pound (GBP). NZ unemployment ticked up from 4.6% to 4.8% in the second quarter but lower than forecast of 5.00%, annual wage inflation slowing for the 6th straight month. Unemployment is expected to continue rising giving support to much further interest rate cuts by the RBNZ. Attention now lies with Friday mornings Bank of England (BoE) cash rate with a 25-point cut to 4.75% predicted.

Current Level: 0.4613
Resistance: 0.4640
Support: 0.4565
Last Weeks Range: 0.4578- 0.4650

With all the currency heat going on amid US elections we have seen the Australian Dollar (AUD), New Zealand Dollar (NZD) cross trade within recent ranges. The Aussie getting a little more bids this week extending off last week’s moves from 0.9090 (1.1000) to 0.9040 (1.1065) this morning. Early week the RBA held their interest rate at 4.35% saying upside risk to inflation remains. Last week’s inflation drop from 3.8% to 2.8% y/y is still too high. Unemployment in NZ rose from 4.6% to 4.8% for the second quarter slightly less than the 5.00% forecast. Third quarter employment participation numbers are predicted to fall further putting stress on high interest rates. Support at 0.9000 (1.1110) may not hold till xmas.

Current Level: 1.055
Resistance: 1.1150
Support: 1.0980
Last Weeks Range: 1.0963 – 1.1054

With all the currency heat going on amid US elections we have seen the Australian Dollar (AUD), New Zealand Dollar (NZD) cross trade within recent ranges. The Aussie getting a little more bids this week extending off last week’s moves from 0.9090 (1.1000) to 0.9040 (1.1065) this morning. Early week the RBA held their interest rate at 4.35% saying upside risk to inflation remains. Last week’s inflation drop from 3.8% to 2.8% y/y is still too high. Unemployment in NZ rose from 4.6% to 4.8% for the second quarter slightly less than the 5.00% forecast. Third quarter employment participation numbers are predicted to fall further putting stress on high interest rates. Support at 0.9000 (1.1110) may not hold till xmas.

Current Level: 0.9040
Resistance: 0.9110
Support: 0.8970
Last Weeks Range: 0.9046 – 0.9121

The New Zealand Dollar (NZD) slumped off 0.6000 numbers to post 0.5910 against the surging US Dollar (USD) overnight as US elections came in. The greenback made big moves across the main board as news of a new Trump led government became reality. The Republican party has gained enough support in both the US Senate and US Congress, this making it easier for the new president to implement “Dollar” positive economic plans such as lower taxes and tariffs. His policies will most likely lead to increased spending impacting inflation. Tomorrow morning’s Fed meeting markets have priced in a 25-point cut to 4.75% but past this point cuts look shady. Long term support in the cross still sits at 0.5850 the lows from late July and mid-April, we pick a retest of this zone in the coming weeks.

Current Level: 0.5942
Support: 0.5850
Resistance: 0.6200
Last week’s range: 1.6300 – 1.6598

The English Pound (GBP) extended its run over the New Zealand Dollar (NZD) through midweek to 2.1840 (0.4580) was unable to hold this level. Comments by chancellor Reeves translated into rates staying higher for longer helping to buoy the Pound. The GBP declined sharply following the UK budget starting a selloff in UK bonds post the announcement of big tax rises on the horizon. The cross shifted from 0.4610 (2.1700) to trade back at 0.4635 (2.1570) early Friday. Next week’s NZ Jobs data and more importantly the Bank of England (BoE) Cash Rate shouldn’t disappoint.

The current interbank midrate is: NZDGBP 0.4632 GBPNZD 2.1587

The interbank range this week has been: NZDGBP 0.4578- 0.4638 GBPNZD 2.1558- 2.1843

Consensus for a 75-point rate cut at this months RBNZ meeting is gathering pace with a dovish economic outlook undermining policy. The New Zealand Dollar (NZD) has been choppy over the week against the US Dollar (USD), the US presidential election keeping a risk off tone, the kiwi reaching a low of 0.5940 before bouncing back into early Friday to 0.5970 levels. ADP jobless claims came in slightly ahead of forecast at 233,000 compared to 113,000 estimates with attention now to Non-Farm Payroll releasing tonight. Anything hot and we could see a shift in policy by the Fed and a lift in the greenback.

The current interbank midrate is: NZDUSD 0.5977

The interbank range this week has been: NZDUSD 0.5939- 0.6001